TMI Blog2022 (8) TMI 622X X X X Extracts X X X X X X X X Extracts X X X X ..... levant assessment year. Thus, respectfully following the order passed by coordinate bench of the Tribunal in assessee s own case cited (supra), we find no infirmity in the impugned order passed by the learned CIT(A). Accordingly, the sole ground raised in Revenue s appeal is dismissed. - ITA No.209/Mum./2022 And C.O. no.70/Mum./2022 (Arising out of ITA No.209/Mum./2022) - - - Dated:- 10-8-2022 - Shri Pramod Kumar, Vice President And Shri Sandeep Singh Karhail, Judicial Member For the Assessee : Shri Ninad Patade For the Revenue : Shri Milind Chavan, Sr. AR ORDER PER SANDEEP SINGH KARHAIL, J.M. The present appeal by the Revenue and cross objection by the assessee are against the order dated 17/11/2021, passed under section 250 of the Income Tax Act, 1961 ( the Act ) by the learned Commissioner of Income Tax Appeals 55, Mumbai, [ learned CIT(A) ], for the assessment year 2012 13. 2. The sole ground raised by the Revenue in its appeal is as under: 1. Whether on the facts and circumstances of the case and in law, the CIT(A) is correct in segregating the HO/NRI/other expenses incurred at HO to a) Direct Staff expenses (Rs. 4,39,02,328/-) and treatin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted that the said expenses incurred are directly attributable to and connected with the business of the assessee and are wholly and exclusively incurred for the assessee Bank and hence allowable in terms of provisions of section 37(1) of the Act. In support of its submission, the assessee also placed reliance upon the decision of coordinate bench of the Tribunal in assessee s own case for assessment year 2000 01. The Assessing Officer vide order dated 20/05/2016, passed under section 143(3) read with section 144C(3) of the Act did not agree with the submissions of the assessee and treated the entire expenditure of Rs. 6,16,57,387, on account of NRI expenses in the nature of Head Office expenses, and accordingly disallowed the same subject to limitation of deduction allowable under section 44C of the Act. 5. In appeal, learned CIT(A) vide impugned order dated 17/11/2021, following the decision of coordinate bench of the Tribunal in assessee s own case for assessment year 2002 03, observed as under: 4.2 I have considered the submission of the appellant. This is a recurring issue. It was first decided by the Hon'ble Tribunal for AY 2002-03 in ITA no.6731/Mum/2006 an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed within the purview of section 44C only. The AO is accordingly directed to rework the deduction u/s 44C. The ground is partly allowed. Being aggrieved, the Revenue is in appeal before us. 6. During the course of hearing, learned Departmental Representative vehemently relied upon the order passed by the Assessing Officer. While, on the other hand, the learned Authorised Representative submitted that similar issue has been decided by the coordinate bench of the Tribunal rendered in assessee s own case. 7. We have considered the rival submissions and perused the material available on record. We find that coordinate bench of the Tribunal in assessee s own case in ADIT v/s Bank of Bahrain and Kuwait, in ITA Nos. 6731 and 6605/Mum./2006, vide order dated 28/01/2011, for the assessment year 2002 03, while restricting the applicability of section 44C of the Act only in respect of allocable expenses and at the same time fully allowing direct staff cost, observed as under: 18. Now we come to the Direct and exclusive expenses of NRI Desk covered under category A, referred to as items 1 and 2 in Table extracted above. It is noticed that there is no disagreement on the amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d basic that any expenditure, to fall in consideration zone of deductibility under the Act, whether u/s 44C or general provisions, must have been incurred for the purpose of business of Indian branch. If that is not the case, then it shall, at the very outset, cease to be considered for deduction under the Act. The natural corollary, which thus follows, is that the exclusive head office expenses incurred, whether for the office in India or NRI Desk outside India, shall be separately deducted under the general provisions of the Act and in the like manner, the shared or allocated expenses incurred by the head office for the Indian branch, within or outside India, shall be considered for deductibility under sec. 44C of the Act. In that view of the matter, we overturn the impugned order on this score and hold that the items of head office expenses mentioned in above table under 3) a to f and 4) a to d, can be only under sec. 44C and there is no scope for granting separate deduction under the general provisions of the Act. It is further subject to the condition that these expenses are, in fact, incurred for the business of Indian branch and there is evidence in support of such expenses. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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